Foreign contracts of service

There are those of us who are employed in Kenya to work outside Kenya…this article looks at the legal provisions governing such employment arrangements.

Definition of a foreign contract of service

A foreign contract of service is a contract that is made within Kenya and that is to be performed either in all or in part outside Kenya. For a contract to qualify as a foreign contract of service, the employee should be required to spend a substantial part of the contract term outside Kenya.

An employment contract where, for example, an NGO employs people in Kenya to work for projects based in Somalia or South Sudan, is a foreign contract of service.

Applicable rules

Special rules apply to foreign contracts of service, reason being, the government wants to ensure that a person sent to work outside the country is well taken care of and will be immediately evacuated to Kenya in the case of emergencies; the special legal provisions exist to protect the employee from abuse and exploitation while outside the country.

There is a prescribed form for such contracts and the contracts should be attested/witnessed by a labour officer. The labour officer will only witness the contract if he is satisfied that:-

1. The terms and conditions of employment contained in the contract comply with the provisions of the Employment Act, 2007 and other labour laws;
2. The employee understands what they are getting into – meaning the contract must be signed by the employee;
3. The employee has given consent to work out of the country;
4. The employee is not bound to serve under another contract during the period provided in the foreign contract; and
5. The employee did not enter into the contract through fraud, coercion and or undue influence.

The employee is required to produce a medical certificate confirming that they are medically fit to perform their duties under the contract.

The Act also requires the employer to give the Government of Kenya security by way of a bond in the prescribed form, together with one or more sureties located in Kenya. The purpose of the bond and sureties is to ensure that the Government can hold either the employer or the sureties liable in case of breach of the contract.

The attestation process is pretty straight forward (and takes less than 10 minutes) as long as all the required documents are provided.

Penalties for non-compliance

If a foreign contract of service is not in the prescribed form or does not meet the above criteria or is not attested by the labour officer, it becomes unenforceable and neither the employee nor the employer can claim under it. This simply means that the situation is a good as one where no written contract was signed and neither the employer nor the employee can raise a claim on the basis of any of its provisions.

It is therefore important for a foreign contract to be compliant in order to give it legitimacy.

According to Section 86 of the Employment Act, 2007, it is a criminal offence punishable by a fine not exceeding Kshs. 200,000/= or imprisonment for a term not exceeding six months or both, to send an employee to a foreign country without the employer and employee entering into a foreign contract of service.

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Next post on…expatriates and tax…

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